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• Investigation revealed that cybercriminals withdrew Rs 87.7 lakh from bank accounts through duplicate SIM cards.
• The Karnataka High Court found BSNL negligent and ordered it to pay Rs 50.5 lakh as compensation, Rs 5 lakh as additional compensation and 9% annual interest.
• The court clarified that the legal responsibility of the guilty party does not end after receiving compensation from the insurance company.

A telecommunication company BSNLCyber ​​fraudsters withdrew more than Rs.87 lakhs from a cooperative bank account due to negligence of The Karnataka High Court has ordered BSNL to pay compensation of over Rs 55 lakh to the bank. The court also ordered that interest at the rate of 9% per annum be paid on this amount from the date of fraud.

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What is the matter?

This case is to Basaveshwara Pattan Cooperative Bank Regular. The bank had a current account with Canara Bank, which was linked to internet banking. For financial transactions to the account, the OTP was coming to the BSNL mobile number registered with the bank. In February 2019, a total of Rs 87.7 lakh was transferred from the bank account in 7 transactions. After investigation, it was found that an unknown person had obtained a duplicate SIM card from the BSNL office in Bangalore without the knowledge of the bank. The original SIM card was deactivated and the fraudsters emptied the entire account by asking for OTP on the duplicate SIM. Although the police later recovered approximately Rs 37 lakh, the bank suffered a net loss of Rs 50.5 lakh. (Photo Courtesy – Pinterest)

Receipt of insurance amount does not absolve the guilty party from liability

BSNL argued that the bank has already received compensation from the insurance company and should not pay any more. The court rejected this argument and said that receipt of insurance money does not absolve the guilty party from legal liability. The High Court dismissed BSNL’s plea and increased the amount of compensation in favor of the bank. The court ordered BSNL to pay Rs 50.5 lakh as damages, additional Rs 5 lakh as damages and interest at 9% per annum from the date of fraud.

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The telephone company was held responsible

After sending a legal notice to BSNL and Canara Bank, the bank took the matter permanently to the Lok Adalat. The court accepted BSNL’s negligence and awarded compensation of Rs 5 lakh. The matter then reached the Karnataka High Court. The High Court in its judgment said that when a bank’s mobile number is linked to OTP-based financial transactions, the liability of the telecom company increases. The court held that issuing a duplicate SIM card for the mobile number of the customer without his knowledge or permission was gross negligence.